To feel panic to owe this much on my mortgage?

[Seoalp]

I’m 36 and recently took stock of my finances after separating from my partner and I am now a single parent to a nursery age child. I own my home but it has an outstanding mortgage of 220k. I feel that approaching 40 this is an awful situation. I have 10k savings and a car on finance. Would you downsize to remove the mortgage? I can manage the repayments but 220k feels like SO much money to owe. I am awake most nights recently worrying about it. My friends never discuss finances at all so I have no frame of reference and feel very alone.

I haven’t even started my mortgage yet and I’m 47. I’m waiting to move back north when my youngest goes to Uni as it’s a lot cheaper than london. I’m not overly worried

Well I'm 61 and renting due to being royally shafted by my exh. I'd rather be in your position!

Don’t worry about asking a question x

If I were you I would stop overpaying for about a year and I’d save up the £500 a month. You’ll feel much more secure with £6k in savings.

I wouldn’t consider the mortgage a debt though as it is balanced by the value of the asset. If you can afford the payments and the insurances comfortably then I wouldn’t consider downsizing until you are ready to release equity in the property

Don't panic that's really not that bad for now
I'm 43 dh 48 and we still have £250k on ours

Divided between my husband and I we owe more than you do, two or three times over. It’s all about salary and house market conditions.

I understand but I think you'll just get used to it. I owe £261k and I'm 37. When I first got my mortgage, alone, I owed £280k and I had a few weeks of OH MY GOD about it. Then you just get used to it. You're going through a lot of change and coping with carrying things alone that you used to share the weight of. But you can do it! You're in a great position.

A mortgage is actually a good use of balance sheet because you're not taxed on the increase in your asset (ie your house goes up in value but unlike eg interest earned on financial products, you're not taxed on that increase unless it's not your primary residence, when you pay capital gains tax upon sale). You're increasing your equity. It's cheaper than renting. Moving is expensive. You can make the monthly payments easily. You've got this.

That's really unfair. People have anxieties. It's not always possible to 'feel someone else's toothache'. Just because the OP's anxiety is less catastrophic than the next person's doesn't mean it's any less valid.

So many good comments here.
220k owed and 280k equity is doing fantastic coupled with currently affordable repayments and great overpayments puts you in an enviable position. Q: How many years left taking into account the overpayment? Would absolutely keep the 10k as your emergency fund.

It wouldn't be £220k if you remortgage though, we fixed and remortgaged every 2/3 years and ended up paying it off about 20 years early.
Keep overpaying and then when you remortgage the value will have increased (hopefully!) and you've been paying it off so the LTV rate is better which means you get a better interest rate/lower payments, can overpay more eahc month and so on.

It's fine if you can pay it

YANBU - because at the age of 34 I went through the same thing as you and had to divorce my then husband. So I know exactly what you're going through and how truly scary it is being solely responsible for the mortgage and all the bills.
It does get easier as time goes by with work promotions etc but will take time to get used to, so don't beat yourself up over it.
My main advice going forward is to not take on other debt unless you really have to. This will send your anxiety through the roof, it's not worth it.
Good luck for the future.💐

@Seoalp

You're doing well not to be just sobbing in the corner this soon after your break up!

You're focussing on the mortgage, but I suspect that's not what's worrying you really.

it's a big change from how you thought your life was going, partner, young child, life plans. You didn't set out to raise a child by yourself.

your financial situation is actually very good.

yes, it seems like a lot of money to owe, especially when you're single (me too) but you need to remind yourself it's a mortgage against an asset, it's security, you have more equity than debt and you have the money to over pay.

although over paying may not be the best move. I save instead of overpaying as it's a better interest rate and I like having the money to use as I need to. I'm not in a huge hurry to pay the mortgage off. And if I want I could pay a lump sum off but I'd rather have the cash available to do some renovations etc

Spend a bit of time making the house YOURS, (one of the silver linings to being single), enjoy your DD & give your brain sometime to come to term with the changes & work out what you're struggling with, because it absolutely doesn't need to be your mortgage 🌷

Is the house too big for your needs? Or particularly (as in more than the average house) expensive in terms of utilities and maintenance?

If not, since you can afford the repayments, it’s most likely a sound investment for you.

You say upthread that you don’t have a buffer, I think this might be the thing to work on. Rather than overpaying the mortgage each month you might be better off building up a significant emergency fund. Especially since you only have only one income coming in, having 6 - 12 months of expenses somewhere in savings you can access immediately should you lose your income for some reason would probably help you sleep better at night.

Sorry to hear about your recent break up. I wonder whether you aren't really familiar with the jargon around this all... Hope you find it helpful to look at it like this:

You owe 220k overall
But if everything went tits up and you needed money, you could sell at approx 550k, pay back your 220k mortgage and still be left with 320k, in cash. 320k!

The£500 you're overpaying, could potentially work better for you though. If you're in a fixed rate period, overpaying during the fixed rate period won't bring down your monthly bill. Better to pay the extra £500 straight into a high interest savings account ( ISA or check money saving expert, as ISA generally only makes sense if you get over £1k in interest on your savings per year, so a normal savings account might pay a higher rate and you'd still not have to pay tax on the interest). Then, come the end of your fixed term, you'll have a nice lump of X months * £500, plus the lump of interest on that amount, and you can pay that into the mortgage debt before re-fixing.

If you do it that way, you'll also be building up a savings pot that if ABSOLUTELY necessary you could dip into in an emergency. But preferably it would all go on the mortgage debt at the right time.

I understand where you're coming from op, and I feel the anxiety is natural as it's a huge shock to find yourself alone with a mortgage (been there).

I think your worry might be about being the only be responsible rather than the amount itself.

It's different if you he a partner who is contributing because that gives you a kind of safety net. If it's just you, you do feel vulnerable (I did).

Over thr years, as the asset goes up and the mortgage decreases, you start to feel more in control. Then it drops to a level where it feels manageable. Then you feel empowered when it actually gets quite low.

Hang in there it will get better over time.

But many people are paying more than your mortgage payments in rent each month. They’ve got no debt but they’ve got no equity either. You’ve got enough equity to buy outright in a lot of areas so you’ve got more security than many people could dream of.

You don’t seem to understand what a mortgage is. If you can’t pay it you just sell your house. The only time it’s like a normal debt is if there’s negative equity.

Why is the GP going to pay the mortgage?

Personally I wouldn’t overpay in your situation. I think what potentially makes you financially vulnerable is “only” having £10k savings and not the size of the mortgage debt. You would probably beat the interest rate on your mortgage anyway in a savings account. I do understand the anxiety of being solely responsible financially as a single parent but it sounds like you’re in a good position. I have a huge mortgage but doubt I’ll be in the same house in 25 years time anyway so it’s largely irrelevant as long as I can pay it.

Most of my peers only bought in their late 20s or early 30s with 10% deposits so I expect most of them have larger mortgages than you do.

Oh how the other half live.. my house was 95k and sometimes struggle to even pay that but dont get stressed! I'd love to be in a position To pay extra on such a house... unless it's in London lol then it's probably same size as mine.

I’m 42 and have around £100k left. We’re hoping to move soon so will have to add at least another £200k, probably £300k onto that.

The thought of a larger mortgage does fill me with dread, but on the other hand we need a bigger house.

I can only assume your feeling extra anxious and on edge due to your recent breakup.

Because if you can not only afford the repayments but can also afford to overpay by £500 each month, and have £10K in savings, you're doing a-okay.

No not if you can afford the repayments. You are building up equity and can always sell in the future and move down.

I hate to be in debt. Would rather drive a banger of a car than get a loan out. But I don't see mortgage as debt. It is a long term investment in an asset that will be worth significant amount of money down the line.

If you can't afford or are worried about the cost of the finance then that is a very different story. If its affordable and you like your home and are happy there then you don't have anything to worry about.

I've just remortgaged for renovations. Now owe near to 300k. Early 40's. It will be paid off in 17 years and I'll be young enough to enjoy it. My kids are young enough to benefit from the work done and I accept it for what it is. We have stability. House probably worth close to 500k now.

I'm 34 and DH is 39 and our mortgage is 448,000. Your mortgage sounds totally normal to me tbh.